Qatar’s Big Banks delivered a strong combined net profit of QR23.33bn for the full year 2018, up 9.47 percent compared to QR21.31bn posted in 2017. In terms of profit growth rate, Commercial Bank led the pack by surging a significant 175.52 percent year-on-year to record QR1.66bn. The banking behemoth QNB’s net profit was up by 5.03 percent to QR13.78bn.
Leading Islamic lender QIB’s net profit was up by 14.55 percent to QR2.75bn. Masraf Al Rayan increased its profit by 5.04 percent to QR2.13bn. QIIB added 6 percent to QR882m as Al Khaliji bank’s net profit jumped by 10.51 percent to QR550m.
As most companies announced their net profit for the year 2018, the listed companies combined net profit for the year rose 11.08 percent year-on-year to reach QR49.30bn, compared to QR44.38bn in the previous year.
With improving operating conditions, solid loan performance and strong capital, global rating agencies have projected a stable outlook for Qatar banks this year.
Moody’s Outlook for ‘GCC Banks for 2019’ showed Qatar’s banking system showed stability in all the seven components of credit drivers, including operating environment, asset risks, capital, profitability & efficiency, funding & liquidity and government support. Qatar is among the two countries in the region which ticked all these boxes as ‘stable’ in Moody’s Outlook for the GCC Banks.
The rating agency noted Qatari banks are most reliant on confidence-sensitive foreign funding, along with Bahrain, in the region. The 2019 Outlook expresses the rating agency’s expectation of how banks’ creditworthiness will evolve over the next 12 to 18 months in the GCC.
Meanwhile a section of analysts are bit cautious about the 2019 performance of GCC banks in 2019. The regional banks have reaped the benefits of the US Federal Reserve’s rate hikes, with healthy increases in net interest incomes helping bolster their profits. With Qatari Riyal pegged to the US dollar, the actions of the US central bank have a direct impact on the interest rates charged by the Qatari banks. Now the Federal Reserve has expressed caution about 2019 hikes. A halt on hike rates will weigh on the regional banks’ performance.
After raising rates four times in 2018, and anticipating further hikes in 2019, the Fed in January switched to a “patient” stance as concerns about the global economy took root, and markets voiced doubts about the US economic recovery, a top Doha-based analyst told The Peninsula.
In 2019, the drag on the overall Qatari economy from the blockade should totally fade as financial conditions and confidence recover, helping trade, investment and consumption, said MENA Advisors. The future remains bright for Qatar as a massive expansion of LNG production by about 40 percent will drive investment and consumption starting from 2020. The rest of the economy will be further supported by reforms to the investment and business environment, analysts at MENA Advisors said in its Qatar Country Report.
Source from: The Peninsula